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What is the minimum transfer price

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Question - The Hinges Division of Altoona Corporation sells 116,000 units of part Z-25 to the outside market. Part Z-25 sells for $112 and has a variable cost per unit of $58 and a fixed cost per unit of $10. The Hinges Division has a capacity to produce 190,000 units per period. The Door Division currently purchases 46,000 units of part Z-25 from the Hinges Division for $76. The Door Division has been approached by an outside supplier willing to supply the parts for $72. If Altoona uses a negotiated transfer pricing system, what is the minimum transfer price that should be charged for this transaction?

Reference no: EM132595874

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